Look for the Union Label

The massive Los Angeles school bond approved by voters this year has awakened a struggle between trade unions and builders that could affect public works contracting across the state but also could stall school construction in litigation, say school and building industry officials.

Since before the Proposition BB bond was approved by voters in April, union leaders have been quietly wooing Los Angeles Unified School District officials to enter an agreement that could require much of the $2.4 billion in projects to be done exclusively by union workers.

Open-shop contractors, fearing that the laborers’ groups were about to seize a historic opportunity to establish union-only contracting in the nation’s second-largest school district, have countered with a letter-writing and lobbying campaign hinting broadly at the possibility of a lawsuit to block the move.

After examining a legal analysis in closed session last week, the Board of Education is scheduled to decide today whether to begin negotiations with the Los Angeles County Building and Construction Trades Council on an agreement that could prevent strikes and restrict overtime in exchange for guaranteeing work to unions.

With thousands of projects involving possibly hundreds of thousands of laborers at stake, school board members have begun to look at the issue as a watershed for the district, as well as other public agencies that will receive pressure to follow suit.

“This is huge,” said board member David Tokofsky, who admitted to being caught off-guard by the momentum that has built up around an issue that the board first broached as a way of encouraging apprenticeship programs.

“Nobody knew what a project labor agreement was,” Tokofsky said. Now, Tokofsky said, he is receiving an unprecedented number of lobbying visits from adherents of both points of view.

At issue is a little-known type of pact called a project labor agreement because it covers a specific body of work rather than a time period, as in a traditional labor contract.

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Commonly used in the private sector to secure mutual benefits in costly, long-term projects, the agreements are trickier for public agencies because they can dampen mandatory competitive bidding by eliminating contractors who don’t hire union workers.

Unions say the agreements serve the public by preventing labor strife and assuring quality work at fair pay.

But nonunion contractors, loathe to be cut out from public works projects, have battled the agreements in courts across the nation, arguing that they disrupt competitive bidding and violate labor laws requiring public agencies to remain neutral in labor relations.

In a 1993 decision, the U.S. Supreme Court partially decided the issue, holding that it was legal for Boston to enter into a project labor agreement to help expedite its cleanup of the city’s polluted harbor, but leaving the door open to restrictions that are still hotly debated by both sides and have been litigated in several states.

In California, recession kept the issue dormant through the early 1990s, until the Proposition BB school bond presented a prize worth fighting for, setting up a conflict that could set a precedent for public agencies across the state.

According to a district staff memo, the board took the first step toward an agreement on April 7, the day before the Proposition BB election, approving a motion by member Victoria Castro that set up a labor-management committee to confer with union leaders on a proposal.

Tokofsky said he doesn’t recall who was behind the motion and at the time didn’t grasp its significance.

Castro did not return a call from The Times.

According to the memo, the committee concluded that a labor agreement covering new construction and major renovation projects may benefit the district by promoting fair wages and benefits, expanding job training for district students, extending the workweek to Saturday and encouraging the employment of workers living in the district.

Contractors have mounted strong opposition, asserting that an agreement would increase the cost of the work by eliminating 80% of the potential bidders who will not sign union agreements.

William Larry Tyler, president of the Los Angeles chapter of the Associated Builders and Contractors, said his national organization is already considering litigation to challenge such an agreement with the school district.

“It’s a big issue,” Tyler said. “The unions would like to have it so all public agencies end up with a project labor agreement. We’re going to fight all the way. We believe in free enterprise.”

Labor unions have accused contractor groups of conducting a nationwide campaign of litigation and misinformation against project labor agreements.

The contractor groups “who have long worked with unions know that project labor agreements do in fact offer enormous advantages to public works projects,” according to an AFL-CIO and National Contractors Assn. white paper on the issue. “These nonunion contractors know, however, that they cannot provide the same quality craft work or the same number of trained and experienced craft workers,” the white paper also said. Efforts to reach union officials were unsuccessful.

In light of the potential for litigation, Fram Virgee, an O’Melveny & Myers attorney who is preparing a legal opinion for the board, said he will advise caution.

After reviewing the Boston Harbor decision, Virgee said, he concluded that an agreement could be successfully challenged on several grounds, the most important hinging on the district’s purpose in signing it.

The ruling allows a public agency to behave like any other consumer by entering into an agreement that serves its financial interest, Virgee said.

But the National Labor Relations Act prohibits the district from using a labor agreement to exercise public policy, such as promoting union membership or encouraging union apprenticeship programs.

Virgee said he will advise the board to examine its intent carefully, and, if it chooses to proceed with a labor agreement, be cautious in explaining why.

In particular, he said, the board will have to make a case for the economic benefit of the agreement in light of the fact that state law requires even open-shop contractors to pay prevailing wages.

However, it may already be too late to keep public policy out of the debate.

The goal of the April 7 resolution, “to provide more labor opportunities for residents and high school graduates of the communities where the construction will occur,” appears to reflect public policy more than economic interest, Virgee said.

Similarly, the labor-management committee has pointed to “fair wages and benefits for workers as a goal of an agreement.

And some members of the generally pro-labor school board are already on record saying wages and labor rules should be considered.

“I am a strong supporter of it,” board member Jeff Horton told The Times. “It has always been my belief that union work gave better quality and was cheaper often in the beginning, and especially in the long run.”

As it assesses that question, the board will find itself buffeted by highly charged arguments over dramatically differing projections.

One way out of the dilemma, Virgee said, would be for the board to initiate negotiations with the trade unions on limited agreements, covering either the schools in a small area or only specified projects.

Another option would be a limited union rule requiring open-shop contractors to abide by terms of the union contract, but not requiring them to sign it, or to hire from the union hall.

Neither alternative, however, would be likely to forestall a bitter fight.

“Why would I want everybody to work by union rules?” asked Tyler of the Associated Builders and Contractors.

Tyler said his workers are cross-trained so that a laborer will, for example, hop onto an earthmover, if necessary, to keep a job moving, and would be paid operator’s wages for the task.

Union leaders counter that such flexibility contributes to rampant violation of the prevailing wage rule, burdening the public agency with costly enforcement proceedings. An all-union shop would eliminate such violations, lowering the project costs, the union official say.

In wading through the arguments the board won’t have any precedent to rely on. “If the district did this, it would be on the cutting edge,” said Virgee, the board’s attorney.